How a Savings Strategy Helps You Reach Your Goals Faster

I have a love-hate relationship with saving money. I love it because it puts me in a position of strength financially. Having cash on hand gives me options that I wouldn’t otherwise have, and it protects me from potentially crippling expenses.

I hate it because it can be hard to know what to save for and when. Without using a proper savings strategy, it sometimes feels like I’m just spinning my wheels. But if I take a step back, it’s easier to establish all my savings goals and put each one its place.

What are your savings goals?

If you ask most people what they’re saving for, you’ll generally get one or two answers. For example, it could be a house, a baby, or a vacation. If you were to ask me, though, you’d get a long list.

As of right now, I’m currently saving for — or wish I could be saving for — the following things:

Obviously, it’s not reasonable to be able to save for all of those things simultaneously — at least not with my income. However, that doesn’t mean I don’t desperately want to make it work.

So, whether you have just a few savings goals or more than you can count, it’s important to have a savings strategy to make sure you’re reaching your goals sooner.

How to create your savings strategy

To put together a solid savings strategy, it takes more than just putting money away each month and winging it. Follow these steps to reach your goals sooner and more effectively.

Write your goals down

Write out all your savings goals. It makes it a lot easier to remember them and to keep them in mind. Take 10 to 15 minutes to do this step to make sure you get them all. Also, be sure to include the goals that you told yourself long ago aren’t possible. Even if you don’t end up getting to them, you should at least try.

Prioritize your goals

Next, put each of them into one of the following three groups:

Urgent and important

Important but not urgent

Less important and not urgent

Here’s how the goals I listed above would break down:

Urgent and important:

Home down payment

Emergency fund

Christmas fund

Important but not urgent:

Traditional retirement

Home renovations

Piano

Van

Kids’ college

Vacations

Other family activities

“Forget You” fund

Less important and not urgent:

Early retirement

Private pilot license

Lasik

In that last group, it’s not that those things aren’t important to me. They wouldn’t be on the list if they weren’t. They aren’t as important to me as those in the first two groups, though.

Keep in mind that your groups may look different, even with the same goals. For example, you may view vacations as a luxury, while I see it as an important part of my life. Only you know what belongs to each group.

Put your money where your mouth it

None of this will work unless you start funneling money toward your goals. If you’re not on a budget, get on one. I prefer You Need a Budget, but there are a ton of other budgeting apps just a Google search away.

Once you’re on a budget — or if you’re already on one — make sure you carve out enough money to put toward your savings goals. Push yourself a little if you need to. Focus first on the urgent and important goals then go down the list from there. Think of it as just another bill and set up an automatic transfer to your savings account each month. Do whatever you need to so you can reach your goals.

Also, I highly recommend finding a side hustle that can net you some extra cash. Almost all of our savings comes from my side business as a freelance writer.

Avoid distractions

The hard thing about goals is that there always seems to be something that gets in the way. And for me, most of the time it’s myself. I usually don’t like to spend money, but we’re currently on track to meeting our home down payment goal so I’ve started to rationalize spending money on things I wouldn’t usually.

Don’t let the shiny things of life get between you and your financial goals. That said, let yourself live a little. If you spend all your time and money looking to the future, your life will be lame. Budget in some fun then get back to your goals.

About Ben Luthi

Ben started Latter-day Finance because he's passionate about helping people better manage their money. He has been writing about money since 2013 and learning about it since long before that. He currently writes full-time for Student Loan Hero and has a freelance writing business on the side.

Hello and welcome! I'm Ben and I run Latter-day Finance. I've been eating, sleeping, and breathing personal finance ever since I first picked up Dave Ramsey's Total Money Makeover in 2009. I believe that managing money well is essential to a fulfilling life. Learn more about me here.

Get posts in your inbox

Email Address *

First Name *

Disclaimer

Latter-day Finance is not affiliated with or sponsored by the Church of Jesus Christ of Latter-day Saints. The opinions in this blog represent the opinion of the author and are not meant to represent the teachings or doctrines of the Church of Jesus Christ of Latter-day Saints. Nor are the opinions endorsed or recommended by the LDS Church.

Popular Posts

Disclosure

The posts on this blog are based on my opinions and personal experiences. Do your own research and consider consulting a financial advisor before making financial decisions. There may be paid advertisements on this website. You are under no obligation to purchase the products or services advertised on this website.